1. The offer
2. What happens after the offer (was it terminated?)
3. The acceptance.

Does an offer need to contain all material terms?

NO!

Does a sales contract need to contain price?

YES, in REAL ESTATE CONTRACTS. No, under the UCC, if the parties are agreeing to flesh it out later. But they can't be too vague ("fair").

Is an advertisement an offer? Exceptions?

Generally, it is not.

Exceptions:
1. Rewards
2. Specific as to quantity and expressly indicates who can accept.

What are the ways an offer can be terminated?

TuRRD

T: Lapse of Time
R: Revocation
R: Rejection
D: Death

How can an offer be revoked?

1. Unambiguous statement by offeror to offeree of unwillingness or inability to contract, or
2. Unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is aware of.

On Tuesday S mails B a letter revoking the offer. The letter arrives Thursday. When is the revocation effective?

If you say "Will you take $9,000?", that's not a counteroffer. It's bargaining.

What happens if there is no valid acceptance and yet the parties perform?

It's an implied contract.

What is the mirror image rule?

At common law (not UCC), the acceptance must be a "mirror image" of the offer.

What is a seasonable expression of acceptance?

It's a fact pattern in which there is
1. An offer to buy or sell goods and
2. A response with additional terms, where the additional terms are not a condition of acceptance.

For seasonal acceptance, how do you tell if the newly proposed term is part of the contract?

1. If both parties are merchants, the general rule is that the additional term is part of the contract, as long as it does not materially change the offer and the offeror does not object to the change.
2. If one or both parties is not a merchant, the additional term is merely a proposal that is to be separately accepted or rejected.

Can you accept an offer from a dead person, if you don't know the offeror has died?

No.

What is an exception to the rule that you can't accept an offer from a dead person?

1. Options
2. Part performance on a unilateral contract.

Who can accept an offer? Exceptions?

An offer can be accepted only 1. by a person who knows about the offer and 2. who is the person to whom it was made.

Exception: Offers cannot be assigned, but options can be (unless the agreement indicates otherwise).

1. Addition to or change in performance.
2. Unforeseen difficulty so severe as to excuse performance.
3. Third party promise to pay.

Does Article 2 have a pre-existing legal duty rule?

NO. The test is good faith for changes in an existing sale of goods contract.

D owes C $3,000. The debt is due and undisputed. C agrees to take $2,000 in full satisfaction. D pays $2,000.

Can C now sue for the remaining $1,000 even though he agreed he would not?

Yes. The debt is due and undisputed.

What is the consideration substitute rule?

A WRITTEN promise to satisfy an obligation for which there is a LEGAL defense is enforceable WITHOUT consideration.

Do intoxicated persons lack capacity?

Only if the other party has reason to know.

What are the contracts within the Statute of Frauds?

MR. EGGS

Marriage
Real Estate
Executors
Guarantors
Goods $500 OR MORE
Service contract for greater than one year

What is the "main purpose" exception?

Guarantors' promises usually fall under the Statute of Frauds. However, if the guarantors' promise is designed to protect his own interests (e.g., someone is buying paint for guarantor's house), the Statute of Frauds does not apply.

O orally agrees to employ P for three years, but O can terminate the contract on 30 days' notice.

Is this within the Statute of Frauds?

Yes. It can be TERMINATED but not PERFORMED within a year.

Do tasks fall within the Statute of Frauds?

No. It's always assumed that it can be performed within a year.

A offers his car to B for $500.

Within SoF?

YES! Does NOT have to be more than $500.

How can SoF be satisfied?

1. Writing: must contain material terms and signed by person to be charged (for UCC, writing must contain QUANTITY).
2. Full performance: services contract (IMPORTANT: part performance does NOT satisfy SoF for a services contract)
3. Part performance: for sale of goods (for the stuff that's been delivered -- except for "specially manufactured goods exception, where a substantial beginning is enough).
4. Real estate: Part performance is enough (two of three: part payment, possession and/or improvements) (FULL PAYMENT OF REAL ESTATE CONTRACT DOES NOT SUFFICE)
5. Judicial admission: testimony; depo; etc.

When is agency power required to be in writing?

When the underlying contract falls under the SoF.

When does a contract modification require writing?

If the modified agreement falls under SoF.

What if the contract provision requires that all modifications be in writing?

It's ignored.

What is the UCC say about contract provisions requiring written modifications?

The UCC approves these provisions (unless the provision is waived).

What if the subject matter of a contract is legal, but the purpose is void?

It's only enforceable by persons who did not know of the illegal purpose.

What's the mental state needed for misrepresentation?

None. Can even be innocent. If seller really doesn't think that the house has termites but it does, that's enough.

1. Shipment contracts. Seller gets the stuff to a common carrier, makes reasonable efforts to delivery and notifies buyer.
2. Destination contracts. Seller has to actually get it to buyer.

What are the rules for determining who bears risk of loss?

1. Agreement controls.
2. If a party breaching it's responsible for loss (even if the loss is unrelated to the breach).
3. If delivery is by common carrier, risk of loss shifts to buyer as soon as seller sends it off.

What if the agreement doesn't talk about risk of loss; there's no breach; and no common carrier?

Look to see if SELLER is a merchant. If seller is a merchant, risk shifts from seller upon buyer's 'receipt.' If seller is not a merchant, risk shifts upon 'tendering.'

Is showing a sample a warranty?

Yes. It's a nonverbal express warranty.

What are the two types of implied warranties? Describe.

1. Implied warranty of merchantibility: seller must be a merchant dealing in goods of that kind; goods are fit for ordinary purposes.

2. Implied warranty of fitness for a particular purpose: buyer has a particular purpose; buyer is relying on seller; seller HAS REASON TO KNOW of purpose and reliance.

It must occur before acceptance. If the goods are less than perfec,t the buyer has the option to reject unless there's a cure or an installment sales contract.

Can seller cure after time for performance has expired?

Usually, no. But if seller has reasonable grounds for believing that improper tender would be accepted (maybe via prior course of dealings) it might be okay.

What is the rule for installment contracts?

Buyer has the right to reject an installment only where there is a substantial impairment in THAT installment that can't be cured.

What are the requirements for revocation of the acceptance of goods?

1. Nonconformity substantially impairs the value of the goods
2. Excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction and
3. revocation within a reasonable time after discovery of nonconformity.

Is it okay to pay a contract with a check?

Typically, yes, but the seller doesn't have to take it. If he doesn't take it, buyer gets additional reasonable time.

What is reclamation and what are its requirements?

Reclamation is the right of an unpaid seller to get its goods back. Requires:

1. buyer must have been insolvent WHEN HE RECEIVED THE GOODS;
2. seller must demand return of goods within 10 days of receipt (this becomes "reasonable amount of time" if buyer had assured solvency);
3. buyer still has goods (if buyer sold 'em, no reclamation).

What is the rule re. good faith purchasers and entrustment?

If an owner leaves her watch with a person who sells watches (to be repaired), the the entrustee sells the watch to a good faith purchaser, the owner can't get her watch back.

What are the ways to measure contract damages?

1. Protection of expectation: put plaintiff in same economic position as if contract had been performed.
2. protection of reliance interest: put plaintiff in same economic position as if contract had never happened.

What are the types of breach for sales of goods, and the remedies for each?